Thursday, January 27, 2011

Labour approved of part-privatisation in 2002

Cast your mind back to the last Labour Government.  A government opposed to privatisation? Not quite.

The evidence is clear, as Michael Cullen issued a press release on behalf of the government in 2002 approving Qantas buying 4.99% of the mostly nationalised Air New Zealand, and approved an application by both airlines to get Commerce Commission and ACCC (Australian Competition and Consumer Commission) approval for Qantas to ultimately buy 22.5% of Air New Zealand.

If it was good enough for Helen Clark, Michael Cullen, Trevor Mallard and Paul Swain (and the rest of Cabinet including Phil Goff, Annette King et al) then, why is it not any good now?

I opposed that at the time for the simple reason that the whole Air NZ nationalisation debacle was partly caused by the government sitting on its hands and not approving Singapore Airlines's request to lift its shareholding in Air NZ/Ansett Australia to 49%, because Qantas lobbied the government saying it had a "better idea" even though all of Air NZ's private shareholders opposed it.

It was a classic example of corporatist lobbying which successful killed off a competitor.  Qantas got what it wanted; the failure of Ansett (its biggest competitor) and a chance to gobble up Air NZ to ensure it was never threatened in its own patch again.  The latter didn't ultimately happen, but let's be clear.  Whilst Air NZ/Ansett did make poor business decisions, its collapse was precipitated because of government interference in a business decision that would have saved it.

That is the level of competence of those in the Labour Party who think, somehow, that they can manage large businesses well, when they have helped bring one to its knees, thanks to its competitor helping it out.  Then Labour sought to hand over part of what is now deemed to be a "strategic asset" (whatever that is) to its biggest rival.

The Greens did oppose any sale, because the growth in the public sector is seen as a "good" by those who think the people = the state.   However, it's sad that while Labour has no credibility, National can't have the courage of its convictions to argue that government should be in the business of owning businesses at all. 

1 comment:

John Macilree said...

For those that may not remember the conditions the Australian Government imposed on Air New Zealand's purchase of Ansett in June 2000 see: